NATSO, SIGMA, NACS, ATA, TCA Statement on IRS, Treasury Preliminary Proposed Rule for Implementation of the Clean Fuel Production Tax Credit

ALEXANDRIA, Va., Jan. 10, 2025 /PRNewswire/ -- NATSO, representing truck stops and travel plazas, SIGMA: America's Leading Fuel Marketers, the National Association of Convenience Stores (NACS), American Trucking Associations (ATA) the Truckload Carriers Association (TCA) today expressed strong concern with the Department of Treasury's preliminary proposed rule implementing the Clean Fuel Production tax credit, also known as the "Section 45Z" credit. Today's preliminary proposal falls short in addressing issues critical to stabilizing the biofuels market. The associations, which represent fuel retailers and consumers of biofuels, urge Congress to extend the $1 per gallon biodiesel blenders' tax credit as quickly as possible.

"Today's piecemeal, preliminary proposal is a classic case of 'too little, too late' for a supply chain that needed clear, unambiguous direction months ago," said David Fialkov, Executive Vice President of Government Affairs for NATSO and SIGMA. "It fails to provide the market with the certainty needed to mobilize new capital, and as a result we expect that potential investments in clean fuel will be sidelined."

"This credit represents a decidedly anti-consumer shift in biofuel tax incentive schemes. Very few ethanol producers will be able to access the 45Z credit, eliminating any potential for this policy to lower retail gasoline prices," Fialkov continued. "Even worse, the new 45Z credit will result in a materially diminished incentive for renewable diesel fuels and biodiesel. It appears that the preliminary proposal would allow imported used cooking oil from China to claim the credit if it is making renewable jet fuel, but not renewable diesel. This is environmentally and economically unjustifiable. Diesel prices will go up and fuel emissions will go up. This policy needs to be fixed as soon as possible."

"It is time for Congress to extend the longstanding $1 per gallon biodiesel blenders' tax credit to help ensure market stability until the incoming Administration and Congress have the opportunity to address longer-term tax policy in 2025," said LeeAnn Goheen, Senior Director of Government Affairs for NATSO and SIGMA. "For well over a year, the clean fuel supply chain repeatedly has implored the Administration to clearly define how the credit will function with ample time for scrutiny and feedback. By allowing this to languish until days before the next Administration takes office, Treasury has set a course for higher fuel prices, increased emissions, and lost agricultural jobs as the biodiesel industry effectively shuts down."

"ATA supports federal policies that ensure the trucking industry has access to reliable supplies of affordably priced fuels. Trucking companies that use biodiesel and renewable diesel require certainty that these lower-carbon fuel options are cost-competitive and readily available at the pump. We are concerned that this new 45Z guidance fails to meet that needed guarantee," said Henry Hanscom, Senior Vice President of Legislative Affairs at ATA.

"The biodiesel blenders' tax credit directly lowers the cost of diesel fuel for truck drivers, which in turn reduces shipping costs and helps lower the prices consumers pay for goods transported by truck. This 45Z credit will do none of those things," said David Heller, Senior Vice President of Safety and Government Affairs with the Truckload Carriers Association.

"This preliminary proposal offers little reassurance to the biofuels supply chain, which is already wary of this untested new credit," said Doug Kantor, General Counsel at the National Association of Convenience Stores. "Extending the Biodiesel Tax Credit is the most effective path Congress can take to keep fuel prices low in the coming year."

Despite a statutory requirement that Treasury issue final guidance no later than January 1, 2025, the biofuels supply chain will continue to navigate a climate of uncertainty left in the wake of today's preliminary proposal. The Department of Energy's updated Argonne Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET) model was not released in conjunction with the rule, and the industry is also awaiting a rulemaking on "climate smart agriculture" practices from the Agriculture Department.

Biodiesel and renewable diesel continue to be the most widely used low-carbon fuels in commercial trucking and remain the most viable option for reducing carbon emissions from the nation's trucking, home heating oil, and rail industries in the near term. The biodiesel blenders' tax credit has been instrumental in developing a strong renewable diesel industry in the United States, driving significant growth in production. The U.S. biodiesel and renewable diesel market expanded from approximately 100 million gallons in 2005 to around 4 billion gallons in 2023, all while contributing to lower transportation-related carbon emissions.

About NATSO, SIGMA, NACS, ATA and TCA

NATSO is the trade association representing America's travel plaza and truck stop industry. Founded in 1960, NATSO represents the industry on legislative and regulatory matters; serves as the official source of information on the diverse travel plaza and truck stop industry; provides education to its members; conducts an annual convention and trade show; and supports efforts to generally improve the business climate in which its members operate. Contact: Tiffany Wlazlowski Neuman, Vice President, Public Affairs. 202-365-9459

SIGMA is the national trade association representing the most successful, progressive, and innovative fuel marketers and chain retailers in the United States and Canada. Founded in 1958 as the Society of Independent Gasoline Marketers of America (SIGMA), SIGMA has become a fixture in the motor fuel marketing industry. Representing a diverse membership of approximately 250 independent chain retailers and marketers of motor fuel, the association serves to further the interests of both the branded and unbranded segments of the industry while providing information and services to members. For more information visit SIGMA.org.

NACS advances the role of convenience stores as positive economic, social and philanthropic contributors to the communities they serve. The U.S. convenience store industry, with more than 153,000 stores nationwide selling fuel, food and merchandise, serves 165 million customers daily—half of the U.S. population—and has sales that are 10.8% of total U.S. retail and foodservice sales. NACS has 1,300 retailer and 1,600 supplier members from more than 50 countries.

ATA is the largest national trade association for the trucking industry. Through a federation of 50 affiliated state trucking associations and industry-related conferences and councils, ATA is the voice of the industry America depends on most to move our nation's freight.

TCA is the only trade association whose sole focus is the truckload segment of the motor carrier industry. The association represents dry van, refrigerated, flatbed, tanker, and intermodal container carriers operating throughout North America. Founded in 1938, the TCA represents operators of nearly 210,000 trucks, which collectively produce revenue of more than $38 billion in annual truckload revenue.

SOURCE NATSO